FIVE YEARS' HELP.

Auckland Star, Volume LX, Issue 257, 30 October 1929, Page 23

FIVE YEARS' HELP.

THE BOOT INDUSTRY.

NEED FOR REORGANISATION

REPORT ON ECONOMIC POSITION.

EXTRA PROTECTION SUGGESTED

(By Telegraph.—Parliamentary Reporter.)

WELLINGTON, this day.

Increased Customs protection for five years to enable the New Zealand boot manufacturing industry to reorganise itself to meet outside competition is the principal suggestion of the committee which has reported to the Hon. J. G. Cobbe, Minister of Industries and Commerce, on an economic survey of that industry. It comprised four representatives each of manufacturers and employees, with five officials, Mr. I. W. •Collins, secretary of the Industries and Commerce Department, being chairman. Except for the official members, who . could not express their views on policy, the committee unanimously supported the following resolution: "That recommendations made in this report cannot be effective without the safeguard of an additional Customs tariff of 5 per cent for a period of five years. Granting of this increased tariff would, it is felt, enable manufacturers to adopt recommendations by giving them necessary increased output, and, furthermore, would enable footwear made in New Zealand to be sold without increase in prices." Briefly summarised the recommendations for improvement of the industry are as follow:

(a) That the "payment by results" systems be installed in factories to reduce unit labour costs.

, (b) That factory lay-outs be analytically studied, machinery and equipment rearranged to reduce, lost motions between operations to a minimum.

" (c) That routing of orders by a planning clerk be established in factories, in order to deliver work in correct sequence at the least cost.

(d) That the method of settling local differences between employers and employees should be improved.

(e) That accurate detail costing of •work is essential for manufacturing purposes, and that such methods should be installed. That an experienced consulting management engineer be made available to those in the industry an! other industries. (g) That, on.-account of the small size of New Zealand factories compared with their overseas competitors, the question of amalgamation in respect of the small order question and multiplicity of design be Considered. (h) That certain manufacturers having been able to operate on a satisfactory paying basis by disposing of their products through retail shops, which they control, or mainly supply, it is suggested that the question of co-operative action between manufacturers be considered, with a view to the reduction of marketing and distribution expenses. ; (i) Co-operative action between Zealand manufacturers in the establishment of a purchasing centre for materials would : reduce stocks of materials, particularly foreign leathers that now frequently become dead stock. (j) That the question of manufacturers retailing their own products is indicated as a means of meeting competition from overseas products. High Quality Products. The report states "that, with regard to the quality of ■ work done in New Zealand we are in no doubt that the highest quality work can be, and is being done in certain factories. The demand from retailers appears to be, however, the governing factor. There are as many different processes of manufacturing shoes of different classes, as there are large factories; and, while a t high grade and generally branded produce ia a true high grade product, other grades are made vo meet <he demand and -ompe'/itiria. from abroad.' The leading deficiencies of the industry are discussed at length, and it is shown ; that the number of -employees has been stationary for many years, while short time work is more prominent than in any other factory industry. It is shown that there has been some slight loss of trade by local makers in favour of overseas supplies. Imports have supplied the whole of the increase in trade resulting from, increased population; consequently imports now supply an appreciably greater proportion of trade than in pre-war years. Manufacturing Difficulties. . "We have been struck by the remarkably high cost involved, apparently as the result of the diversification of output, of most of the factories, more particularly of those engaged in women s shoes. It is evident, of course, that manufacturers must meet market requirements in regard to fashion changes, and the expenses involved in rapid fashion-changes affect'both imported and Dominion-made footwear. There remains, however, the outstanding fact that local manufacturers, working independently, are bearing a relatively heavy charge in respect of ' the cost, designing, and making patterns for a range of samples, many of which go into production to a very limited extent. Indeed, production from some designs is apparently nev ei acceptable to the trade. Many of the factories, even those of comparatively small output, are forced, through competition from overseas, to put out from 150 to 300 new designs per annum. Ten factories, for which reasonably accurate figures are available, are preparing a total of approximately 1700 designs per annum." , .The report states that, while there is considerable divergence of opinion among manufacturers as to what constitutes a reasonably adequate or economic manufacturing order, tickets ior two dozen pairs would be generally legarded as quite sufficient to enable factories to get down to a satisfactoiy eost basis. Non-flexible Labour. It is pointed out that labour conditions in competitive countries aie less rigid than in New Zealand, but tlie committee found its effort to make a seriout recommendation regarding an alternative to the present system had to-be abandoned, though recognition of the need for a change in the system oi payment of employees, without risk of reduction in the ruling minimum wages, was carefully considered. - A majority of the factories in New Zealand employ the day-rate system of payment. Some, however, employ the piecework system permitted under the award by special agreement with employees of individual factories. Many factory managers hold decided opinions against the practicability of employing any system of payment by results. "But," says the report, "we

are forced to point out that there is no question arising in this matter, since such systems are actually in operation, and successfully so, in some factories in the Dominion." The committee, subject to a number of safeguards, which it enumerates, recommends payment by the principle of piecework in the boot industry; that employees in any factory numbering sixty hands and over, inclucling office staff, should be entitled to negotiate with the employer in fixing piecework rates. Each department shall elect a committee to act with the employer in fixing such rates. Every factory employing under sixty hands may fix upon a system of piecework rates,- provided that such rates are submitted to a district council, with representatives of employers and employees in the industry.

Among the suggested conditions is provision that when piecework rates are fixed for any factor}' it shall b'e understood between the employers and workers affected that, unless the individual earnings are increased by 10 per cent above award rates after a lapse of three months, the rate fixed by the award shall be 'reverted to. Every endeavour shall be made during a period of three months as between employer and depart-1 ment concerned to adjust conditions so ] as to enable 10 per cent extra to be earned. Heavy Selling Expenses. The report refers to the high cost of marketing the product as a striking feature of the industry. "We have been surprised to learn of the number of salesmen who are constantly employed seeking business, and the total financial burden on the industry must be extremely heavy. Travelling expenses in relation to turnover in the case of several businesses have been remarkably high, and, even where the cost of the whole turnover has not resulted in a particularly high average, the figures for particular districts have clearly indicated serious economic and trading cost. This apparently arises from a desire to maintain the total factory output, and from a hope that improvement in unsatisfactory districts may gradually be manifested."

It is also pointed out that it is clearly evident that, in competition with overseas suppliers, local manufacturers are at a substantial disadvantage in relation to cost of credit given to retailers, and in respect of bad debt risk. As the direct result of the competitive position of trade, manufacturers in the Dominion are often forced to give comparatively long term credit to retailers, and bad debts figure heavily, the committee ascertaining that some manufacturers write off 6d a pair through this cause.